After World War II, Luciano was paroled from prison on the condition that he permanently return to Sicily. However, Luciano secretly moved to Cuba, where he worked to resume control over American Mafia operations. Luciano also ran a number of casinos in Cuba with the sanction of Cuban president General Fulgencio Batista, though the US government succeeded in pressuring the Batista regime to deport Luciano.
Batista’s closest friend in the Mafia was Lansky. They formed a renowned friendship and business relationship that lasted for a decade. During a stay at the Waldorf-Astoria in New York in the late 1940s, it was mutually agreed upon that, in exchange for kickbacks, Batista would offer Lansky and the Mafia control of Havana’s racetracks and casinos. Batista would open Havana to large scale gambling, and his government would match, dollar for dollar, any hotel investment over $1 million, which would include a casino license. Lansky would place himself at the center of Cuba’s gambling operations. He immediately called on his associates to hold a summit in Havana.
The Havana Conference was held on December 22, 1946, at the Hotel Nacional. This was the first full-scale meeting of American underworld leaders since the Chicago meeting in 1932. Present were such figures as Joe Adonis and Albert “The Mad Hatter” Anastasia, Frank Costello, Joseph “Joe Bananas” Bonanno, Vito Genovese, Moe Dalitz, Thomas Luchese, from New York, Santo Trafficante Jr. from Tampa, Carlos Marcello from New Orleans, and Stefano Magaddino, Joe Bonanno’s cousin from Buffalo. From Chicago there were Anthony Accardo and the Fischetti brothers, “Trigger-Happy” Charlie and Rocco, and, representing the Jewish interest, Lansky, Dalitz and “Dandy” Phil Kastel from Florida. The first to arrive was Lucky Luciano, who had been deported to Italy, and had to travel to Havana with a false passport. Lansky shared with them his vision of a new Havana, profitable for those willing to invest the right sum of money. According to Luciano’s evidence, and he is the only one who ever recounted the events in any detail, he confirmed that he was appointed as kingpin for the mob, to rule from Cuba until such time as he could find a legitimate way back into the U.S. Entertainment at the conference was provided by, among others, Frank Sinatra who flew down to Cuba with his friends, the Fischetti brothers.
In 1952, Lansky even offered then President Carlos Prío Socarrás a bribe of U.S. $250,000 to step down so Batista could return to power. Once Batista retook control of the government in a military coup in March, 1952 he quickly put gambling back on track. The dictator contacted Lansky and offered him an annual salary of U.S. $25,000 to serve as an unofficial gambling minister. By 1955, Batista had changed the gambling laws once again, granting a gaming license to anyone who invested $1 million in a hotel or U.S. $200,000 in a new nightclub. Unlike the procedure for acquiring gaming licenses in Vegas, this provision exempted venture capitalists from background checks. As long as they made the required investment, they were provided with public matching funds for construction, a 10-year tax exemption and duty-free importation of equipment and furnishings. The government would get U.S. $250,000 for the license plus a percentage of the profits from each casino. Cuba’s 10,000 slot machines, even the ones that dispensed small prizes for children at country fairs, were to be the province of Batista’s brother-in-law, Roberto Fernandez y Miranda. An Army general and government sports director, Fernandez was also given the parking meters in Havana as a little something extra. Import duties were waived on materials for hotel construction and Cuban contractors with the right “in” made windfalls by importing much more than was needed and selling the surplus to others for hefty profits. It was rumored that besides the U.S. $250,000 to get a license, sometimes more was required under the table. Periodic payoffs were requested and received by corrupt politicians.
Lansky set about reforming the Montmartre Club, which soon became the “in” place in Havana. He also long expressed an interest in putting a casino in the elegant Hotel Nacional, which overlooked El Morro, the ancient fortress guarding Havana harbor. Lansky planned to take a wing of the 10-story hotel and create luxury suites for high-stakes players. Batista endorsed Lansky’s idea over the objections of American expatriates such as Ernest Hemingway and the elegant hotel opened for business in 1955 with a show by Eartha Kitt. The casino was an immediate success.
Once all the new hotels, nightclubs and casinos had been built Batista wasted no time collecting his share of the profits. Nightly, the “bagman” for his wife collected 10 percent of the profits at Trafficante’s interests; the Sans Souci cabaret, and the casinos in the hotels Sevilla-Biltmore, Commodoro, Deauville and Capri (part-owned by the actor George Raft). His take from the Lansky casinos, his prized Habana Riviera, the Nacional, the Montmartre Club and others, was said to be 30 percent. What exactly Batista and his cronies actually received in total in the way of bribes, payoffs and profiteering has never been certified. The slot machines alone contributed approximately U.S. $1 million to the regime’s bank account.
The 1959 Cuban revolution and the rise of Fidel Castro changed the climate for mob investment in Cuba. On that New Year’s Eve of 1958, while Batista was preparing to flee to the Dominican Republic and then on to Spain (where he died in exile in 1973), Lansky was celebrating the $3 million he made in the first year of operations at his 440-room, $18 million palace, the Habana Riviera. Many of the casinos, including several of Lansky’s, were looted and destroyed that night.
On January 8, 1959, Castro marched into Havana and took over, setting up shop in the Hilton. Lansky had fled the day before for the Bahamas and other Caribbean destinations. The new Cuban president, Manuel Urrutia Lleó, took steps to close the casinos.
In October 1960, Castro nationalized the island’s hotel-casinos and outlawed gambling. This action essentially wiped out Lansky’s asset base and revenue streams. He lost an estimated $7 million. With the additional crackdown on casinos in Miami, Lansky was forced to depend on his Las Vegas revenues.
When asked in his later years what went wrong in Cuba, the gangster offered no excuses. “I crapped out,” he said. Lansky even went as far as to tell people he had lost almost every penny in Cuba and that he was barely scraping by.
Since the warming of relations between the United States and Cuba in 2015, Lansky’s grandson, Gary Rapoport, has been asking the Cuban government to compensate him for the confiscation of the Riviera hotel that his grandfather built in Havana.